Saturday, February 17, 2018

WHAT IS AN ITIN NUMBER? THINGS YOU NEED TO KNOW ABOUT IT

It's almost the end of February which reminds me about my friend who flew in to United States because she got married to a US Navy. Where did the time go? I can still remember how I helped her research on how to apply for her IRS ITIN upon her arrival in the US. How time flies. It has been two years already since she left Manila and I am happy to hear now that she is all settled there.

Are you also a foreign individual in the United States who tends to be confused on what a Taxpayer id number is all about? Hope this short article about it would be able to help shed some light. :)

First things first, What is an ITIN?

-ITIN stands for Individual Taxpayer Identification Number, which is a number assigned by the Internal Revenue Service (IRS) for tax purposes to individuals who do not have, or are not eligible to have, a Social Security Number(SSN) in the United States. ITINs are used by individuals without Social Security Numbers for federal tax filing purposes with the IRS.

-An ITIN number has nine digits beginning with the number “9” and has a range of 70-88 in the fourth and fifth digit.

-An ITIN can be granted by filling Form W-7. Form W-7 is the official IRS form required to be submitted in order to be issued an ITIN.

Who needs an ITIN Number?

You have to note that The Internal Revenue Service (IRS) issues federal tax reporting and filing ONLY to the ones who do not have SSN numbers (this are the ones who are not residents of US) which is the reason why they do not qualify for an SSN number. Or to make things simpler, it is to provide tax identity to those who are not eligible to get a Social Security Number.

Therefore, any individual who is required to file a tax return to the United States will need to have an ITIN number. So if you are one of the following below, you definitely need to have an ITIN Number:

A person who not have a Social Security Number (SSN), and are not eligible to obtain one

A spouse or dependent of United States or a resident alien

A spouse or dependent of nonresident alien Visa holder

A U.S. resident alien who is filing a U.S. tax return with the Internal Revenue Service (IRS)

A non-resident alien who is required to file a U.S. tax return with the IRS

When should I apply for an ITIN?
You should complete Form W-7 as soon as you are ready to file your federal income tax return, since you need to attach the return to your application.

You can apply for an ITIN any time during the year. However, if the tax return you attach to Form W-7 is filed after the return's due date, you may owe interest and/or penalties. You should file your current year return by the prescribed due date to avoid this situation. (source)